A Nation Of Temps

The U.S. economy has more temporary workers than ever before. According to June report by the U.S. Department of Labor, there are roughly 2.7 million people employed in temporary jobs, a trend that continues as President Obama touts an economic turnaround and healthy job growth after the 2008 recession.

Large retailers like Walmart continue to hire temporary workers at a record pace. When it comes to hiring trends, Walmart — as the largest retailer in the nation — is seen by many economists as a barometer for overall hiring.

“As Walmart goes, so goes the nation,” writes Timothy Noah of Pacific Standard magazine. With 1.3 million workers, the retail giant is the country’s largest private employer, so its hiring patterns tell us something about the health of the larger U.S. jobs market. And recent signs have not been encouraging.”

Things may be better than the dark days of 2008, but the majority of new jobs created are not living wage positions. Few provide benefits or offer the promise of a career.

Walmart sets the trend

The largest U.S. retailer has been hiring an unprecedented number of temps, according to a June 13 Reuters survey that examined the hiring practices of 52 Walmart stores across 50 states. More than than half of the stores surveyed were hiring only temporary workers.

“This trend has been going on in terms of the restructuring of the U.S. economy for the past 30 years. Each recession we see a shedding of more of the full-time good paying jobs replaced by low paying and temporary jobs,” said Professor David A. Schultz in a statement to Mint Press News.

A nation of temps

For millions of workers lacking full-time or even steady part-time employment, a regular day may involve waking up at dawn and waiting at the local temp agency for several hours before being given an assignment for the day. Sally Ryan of ProPublica explains:

“In cities all across the country, workers stand on street corners, line up in alleys, or wait in a neon-lit beauty salon for rickety vans to whisk them off to warehouses miles away. Some vans are so packed that to get to work, people must squat on milk crates, sit on the laps of passengers they do not know, or sometimes lie on the floor, the other workers’ feet on top of them. This is not Mexico. It is not Guatemala or Honduras. This is Chicago, New Jersey, Boston.”

Many companies have turned to temp agencies simply because a temporary worker can be refused health care and be paid less. Ryan continues:

“Host companies are insulated from workers’ compensation claims, unemployment taxes, union drives and the duty to ensure that their workers are citizens or legal immigrants. In turn, the temps suffer high injury rates, according to federal officials and academic studies, and many of them endure hours of unpaid waiting and face fees that depress their pay below minimum wage.”

Some employers have made clear that their aversion to hiring full-time workers is due to the Affordable Care Act, known commonly as “Obamacare.” The employer mandate requires that companies with 50 or more employees provide full-time workers with health care coverage or face a $2,000 fine per worker after the first 30 employees.

The Obama administration delayed the mandate in July, giving employers an additional 12 months to adjust to the new system before penalties begin to kick in. Some of the hiring trends could be in anticipation of the future penalties, but some economists believe that there isn’t enough evidence yet to believe that the trend is forming because of the future Obamacare penalties.

“I would be more persuaded once the law goes into effect and we find systematic evidence, instead of anecdotal evidence. They [employers] may be doing these things about a misapprehension of what is in the law. In terms of firms facing penalties, there have been no penalties imposed so far and the imposition of these penalties has been postponed for 12 months,” said Gary Burtless, an economist and senior fellow at the Brookings Institution in a statement to Mint Press News. “It’s just not a very plausible explanation.”

Problems with the numbers

Regardless of the exact reasons for the shift to temp work, the White House reports news of job growth and economic recovery with little or no mention of the quality of the positions that have been created by the private sector. A full 202,000 jobs were created in June, the White House touts. Last month, it added:

“While more work remains to be done, today’s employment report provides further confirmation that the U.S. economy is continuing to recover from the worst downturn since the Great Depression. It is critical that we remain focused on pursuing policies to speed job creation and expand the middle class, as we continue to dig our way out of the deep hole that was caused by the severe recession that began in December 2007.”

Many economists say this is an overly optimistic message and that the economy may actually be getting worse when it comes to employment.

“The White House is hailing the fact that the number of full-time-equivalent (FTE) jobs in America went down by 56,000 in June? President Obama’s merry band is hailing the fact that the economy replaced 272,000 full-time jobs with 432,000 part-time positions, thus eking out the reported 160,000 gain in total employment for the month?” writes Louis Woodhill of Real Clear Markets.

“It’s the restructuring that’s happening because of free trade and globalization. Many companies are threatening to go overseas. We have seen this grinding down over the past 25-30 years. Coming out of the 2008 recession, it’s continuing to progress in terms of that direction. Most new jobs created are at significantly lower wages, exacerbating this trend,” said Schultz.